By Etim Ukpanah
Turbulence is regular happenstance in air travel which is disturbance from a calmer state by various forces and the common source of turbulence in air travel are mountains, jet streams and storms. While some airlines have experienced turbulence, one airline that has survived a COVID-19 induced economic turbulence is Ibom Air.
Not only has the airline defied many naysayers who predicted doom for the carrier, the airline has remained consistent in efficient operations; it has also demonstrated that government involved entities can be viably in business for impact and value. Whilst same may not be possibly said for other ventures in similar terrain, the Akwa Ibom State model for Ibom Air is a master class worthy of commendation and adoption.
This is to the dismay of one Etim, a self-acclaimed banker and journalist, who in an opinion article, titled: “The Dark Side of Ibom Air”, wherein he posited Ibom Air’s profitability is far from sight . A statement which he was quick to state as a matter of fact as “the margins are thin, especially in the emerging markets where revenues are earned in local currency; but expenses like maintenance, spares, lease amortisation, insurance premiums and so on are incurred in foreign currency, typically the dollar.
You have to deal with exchange rate risks, in addition to fuel cost which usually takes over 85 per cent to 90 per cent of the operating expense. With only three Bombardier aircraft (each carries maximum of 80 passengers or thereabout) and charging an introductory fare of N15, 000 per passenger (about 40 per cent less than competition). Why do you think Okada Air, Nigeria Airways, Chachangi Airlines, Bellview Airlines, Harka Airline, Triax Airlines, ADC Airlines, Al Barka Air, and so on are no more flying?”
It would seem like Etim stared into a crystal ball when just barely eight months into operations, a national lockdown was enforced in Nigeria as part of national and global efforts to curb the spread of coronavirus(COVID-19). This, no doubt, affected many businesses and the Nigerian aviation sector was not spared. So, when the Federal Government announced the total easing of the national lockdown which had left many businesses grappling for survival after two months for some similitude of normalcy, the country was plunged into another avoidable crisis which further shut down the economy for almost two weeks and air travel and business were once again disrupted.
In a bid to justify his pessimism about Ibom Air in the referred article, Etim claimed the money used in setting up the airline could have been diversified into the execution of an agricultural project similar to the one executed by Edo State. In my opinion, Etim was obviously not in touch with realities on ground in Akwa Ibom and that Ibom Air was indeed a necessary component of the far-sighted and visionary economic plan of Akwa Ibom State’s Governor Udom Emmanuel.
Indeed, the airline not only justified the allocation accrued to the state since 2015, it has also proven that Akwa Ibom State was again experiencing forward thinking leadership like it has from the days of Obong Victor Attah. In fact, this was neither a bad business decision or executive recklessness, but the piece that would get the entire region capacity ready for investment and economic opportunities
Emerging from all the “negative effects” of the pandemic, Ibom Air did not cut down on its workforce, fleet, or routes, rather it has undergone a massive expansion in its operations and commenced plans to expand its fleet. Yet, it has not lost its unrivalled position and reputation of being the most efficiently run and schedule compliant airline. One you must agree with me, is worthy of “hyping” going by the industry practice and our “way of doing things”.
Without a doubt, its ambition of an expansion drive across West Africa, Central Africa and maybe up to East Africa may just be within its quick reach as the carrier announced a recorded milestone of 500,000 passengers, while maintaining a reputation of reliability, on-time departures and excellent service. A testament of its ever full capacity on its 90-passenger plane at an average air fare is N40,000.
Though it is a widely acknowledged fact that the airline business is a very capital expensive venture with no instant massive return of investment, ROI, it is the sustenance of the business venture which gives the envisaged profit. With the resilience and success story thus recorded of Ibom Air in this VUCA period, Akwa Ibom and indeed Ibomites have an enviable feat and reputation of great discourse.
Governor Udom must be commended for the bold step of faith he took by investing in the aviation industry and making history in Nigeria as the first and only state to own an airline. He must also be commended for promoting and ensuing corporate governance up-front with the appointment of an international auditor to conduct annual financial audits and a commitment to publish its books publicly. Another move, which punctures any possible allegation on lack of transparency in the management and finances of Ibom Air as the kind of Etim may seek to conceive.
The “Ibom Air” venture is indeed worthy of emulation nationally and sub-nationally. Industry pundits say, Ibom Air is the only domestic airline in Nigeria that publishes its schedule reliability and on-time performance statistics monthly.
This brings a prayer to mind: May the people of Akwa Ibom State be blessed with a leader in the mould or better mould of Governor Udom who will not only sustain the vision of Ibom Air, but improve on it for the benefit of all Ibomites.